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Fresh Off Launch of First Test, TAI Diagnostics Adds Funding

As TAI Diagnostics presses forward on commercialization of its first product, a test for organ rejection in heart transplant patients, the Wauwatosa, WI-based startup recently revealed additional funding to support development of more tests.

TAI Diagnostics is developing a series of non-invasive tests to monitor the health of transplant recipients. The company’s name stands for “Transplant and Immunology,” and is pronounced “tie.”

TAI recently added to a round of equity funding that CEO Frank Langley first shared details on last fall. TAI said in January that the size of the financing was $10 million. However, Langley said in a phone interview Friday that the round encompassed a regulatory document TAI filed with the SEC in October, as well as a second filing that first became public last week. The size of the round now stands at $12.8 million, according to the documents. In total, TAI has raised more than $21 million from investors since launching three years ago, Langley said.

TAI’s first test to reach the market is called MyTAIHeart. It measures levels of cell-free DNA—genetic material released by the patient’s new heart that can enter the bloodstream—to determine whether he or she is in danger of rejecting the organ.

“We’re going to be using the funds for additional clinical trials … and additional commercial laboratory and research personnel,” Langley said. TAI also plans to fund the development of new tests, possibly ones to monitor organs other than the heart, he said. The company would sell those other tests alongside MyTAIHeart, which TAI began shipping in February.

Langley declined to reveal TAI’s current headcount, but a recent LinkedIn search showed that 20 people on the networking website list themselves as currently working at TAI Diagnostics. TAI’s website lists several job openings, including the roles of development scientist, informatics analyst, and software developer.

The standard way of testing for organ rejection is by obtaining a tissue sample from the organ—an invasive procedure. TAI has said previously that while many in the medical community continue to view tissue biopsies as “the current gold standard for monitoring the status of organ rejection,” they carry a risk of infection and can be a lagging indicator of organ damage.

The startup aims to make tests for organ rejection easier and less invasive by requiring only a simple blood draw.

TAI sells its MyTAIHeart test under a centralized, service-based model. Transplant centers and health systems ship blood samples for analysis to the company’s reference lab, which opened in 2016 and is located near TAI’s offices. The startup then sends a report back to the transplant recipient’s doctor by the next business day that explains key findings.

TAI says the test can be administered as soon as seven days post-transplant, and ordered for heart transplant recipients who are as young as two months old.

That age range gives TAI a leg up over Brisbane, CA-based CareDx (NASDAQ: CDNA), said Langley, who in 2015 called that company TAI’s “primary competitor.” CareDx’s AlloMap product was the first blood-based cardiac transplant monitoring test to become widely available following its approval by the FDA in 2008. However, Langley said that unlike MyTAIHeart, CareDx’s test is not indicated for pediatric use.

MyTAIHeart “fills a current void in the marketplace,” Langley said. Looking ahead, he said it will be critical that TAI make a strong push to spur “adoption of this test by the clinical community.”

TAI is offering its MyTAIHeart diagnostic as a lab-developed test, meaning the startup can sell it without receiving FDA clearance. Under an FDA regulatory exemption, a company that develops and uses tests in-house can do so without needing the agency’s approval.

TAI brought in its first dollar of revenue following the launch of MyTAIHeart earlier this year, Langley said. He declined to say what TAI projects its total sales will be in 2018.

The startup is also developing tests to gauge the health of other transplanted organs, such as the kidney, lung, and liver, Langley said. Those tests would rely on cell-free DNA technology similar to that which underpins MyTAIHeart, he said.